Change of Control Agreement

 

(a)

“Annual Compensation” means the total of:

 

(i)

one year of base salary, at the highest base salary rate that you were paid by the Company within a 12-month period prior to the date of your Separation from Service (the “Look-Back Period”);

 

(ii)

100% of the greatest annual bonus for which you were eligible within the Look-Back Period.

 

(b)

“Beneficial Owner” has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(c)

“Cause” for termination means

 

(i)

You use intoxicants, alcohol, drugs or other stimulants or depressants while performing your employment duties and such that the reputation of the Company is adversely affected, as reasonably determined by the Company.

 

(ii)

You fail or refuse to satisfactorily perform your employment duties or any assignment reasonably given to you by the officers of Company or your supervisor.

 

(iii)

You otherwise breach the terms or conditions of this Agreement or any other policy, rule or regulation of the Company generally in effect from time to time.

 

(iv)

You are convicted of or plead guilty or nolo contendere to any felony charge or commit a fraudulent, dishonest, immoral or unethical act with regard to Company, Company’s customers, Company’s prospective customers, suppliers, employees, agents or independent contractors.

 

(v)

You commit an act of moral turpitude.

 

(vi)

You have been found by a court in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law.

 

(d)

“Change of Control” of the Company means and includes each and all of the following occurrences:

 

(i)

an acquisition by a trustee or other fiduciary holding securities under any Employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company or by any Employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or

 

(ii)

The consummation of the sale or disposition by the Company of all or substantially all the Company’s assets; or

 

(iii)

The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or

 

(iv)

A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii), or (iii) above, or in connection with an actual or threatened proxy contest relating to the election of directors to the Company.

 

(v)

Notwithstanding the foregoing, the following events shall not constitute a “Change of Control”: (i) a mere reincorporation of the Company; (ii) a transaction undertaken for the sole purpose of creating a holding company that will be owned in substantially the same proportion by the persons who held the Company’s securities immediately before such transaction; or (iii) a transaction effected primarily for the purpose of financing of the Company with cash (as determined by the Board in its discretion and without regard to whether such transaction is effectuated by a merger, equity financing or otherwise).

 

(e)

“Code” means the Internal Revenue Code of 1986, as amended.

 

(f)

“Company” means General Employment Enterprises, Inc., and any successor as provided in Section 7 hereof.

 

(g)

“Disability” means that, at the time you Separate from Service, you have been unable to perform the duties of your position for a period of 90 consecutive days as the result of your incapacity due to physical or mental illness.

 

(h)

“Good Reason” means the occurrence of one of the following without your express written consent: (i) a material reduction of your duties, position or responsibilities, or your removal from such position and responsibilities, unless you are offered a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation, title and status); (ii) a reduction by the Company in your base compensation (base salary and target bonus) as in effect immediately prior to such reduction; (iii) a material reduction by the Company in the kind or level of employee benefits to which you are entitled immediately prior to such reduction with the result that your overall benefits package is significantly reduced unless such reduction is applicable to employees generally; (iv) you are requested to relocate (except for office relocations that would not increase your one way commute by more than 50 miles); or (v) the failure of the Company to obtain the assumption of this Agreement pursuant to Section 7. In the event any of the occurrences in (i) through (v) above have occurred, the Company shall be given written notice by you of your intention to so terminate your employment, such notice: (A) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Good Reason is based, (B) to be given within thirty (30) days after you knew of such acts or failures to act, and (C) to state the effective date of the termination which shall be no less than thirty (30) days from the date of the notice.  In the event such notice is timely given by you, the Company shall have thirty (30) days after the date that the notice is given in which to cure such conduct, to the extent such cure is possible.

 

(i)

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) of the Exchange Act but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as Trustee).

 

(j)

“Separation from Service” or “Separates from Service” means a termination of employment with General Employment Enterprises that the Company determines is a Separation from Service in accordance with Section 409A of the Code.

 

(k)

“Severance Payment” means the payment of severance compensation as provided in Section 3 of this Agreement.

 

(a)

You will be entitled to a Severance Payment in an amount computed as follows:

 

(i)

A lump sum payment equal to all unpaid compensation remaining from day of separation to end of the term of your employment agreement; plus

 

(ii)

Continuation of health insurance benefits for 6 months following the Separation from Service, subject to IRS non-discrimination rules; plus

 

(iii)

Reimbursement for the premiums associated with COBRA for 18 months following the 6 month continuation of health insurance period, subject to IRS non-discrimination rules; plus

 

(iv)

The same percentage of Company-paid group-term life insurance benefits as were provided to you and your family under plans of the Company as of the Change of Control for a total of twenty-four (24) months, following the year in which you Separate from Service.  Notwithstanding the foregoing, the Company may, at its option, satisfy any requirement that the Company provides coverage under any plan listed in Section 3(a)(ii)-(iv) by instead providing coverage under a separate plan or plans providing coverage that is no less favorable.

 

(b)

Notwithstanding anything contained in Section 3(a) above, the Company shall have no obligation to make any payment or offer any benefits to you under Section 3(a) if you Separate from Service prior to a Change of Control or if you Separate from Service  after a Change of Control for Cause, death, Disability, retirement or voluntary resignation other than for Good Reason.

 

(c)

The payments set forth in Section 3(a) above shall be subject to your execution and delivery of a general release (that is no longer subject to revocation under applicable law) of the Company, its parents, subsidiaries and affiliates and each of its officers, directors, employees, agents, successors and assigns in the form that is acceptable to the Company (the “General Release”).  All payments under Section 3(a) shall begin within sixty (60) days following a Separation from Service, provided, however, that if the sixty (60) day period begins in one calendar year and ends in the second calendar year, payment will be made on the first day in the second calendar year after your execution and delivery of the General Release (that is no longer subject to revocation under applicable law).

 

(d)

Notwithstanding the foregoing, in the event that all or a portion of any payment described in Section 3(a) constitutes nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and you are at such time a specified employee, such payment or payments that constitute nonqualified deferred compensation within the meaning of the Code shall be made six (6) months and one day after the date you separate from service (within the meaning of the Code).

 

(e)

Notwithstanding the foregoing, in no event will payments under Section 3(a) exceed 2.99 times your base compensation under Code Section 280(G).

By:

By:

Salvatore J. Zizza

Its:

Chief Executive Officer

Date:

Date: